London housing market is hot, says surveyThu, May 18, 2006
Value of a 'typical' home has increased almost 50 per cent
By HANK DANISZEWSKI, LONDON FREE PRESS BUSINESS REPORTER
A new survey shows London has the third-hottest housing market in Ontario with prices up almost 50 per cent in the last five years. The Century 21 survey shows the value of a “typical” three-bedroom bungalow in London has shot up 48 per cent since 2001, from $131,000 to $194,000.
London’s increase was just behind Peterborough (54 per cent) and Kitchener (51 per cent).
Costa Poulopoulos, president of the London and St. Thomas Real Estate board, said London has been catching up in recent years after lagging behind the real-estate boom seen in the Greater Toronto Area and other regions.
He said the sharp rise in real estate is good news to London homeowners even if they have no intention of selling their homes.
“They find that homes similar to their own are selling for a lot more money and that boosts confidence.”
But Poulopoulos said London is still affordable for new home buyers.
“We are still under the $200,000 price point, which is amazing compared to other major metropolitan areas.”
Poulopoulos said London realtors are seeing clients from the Toronto area who are selling their homes and buying much more impressive homes for less money in London.
There are predictions the London market would slow down this year, but real-estate board figures show sales of detached homes are three per cent ahead of the same period in 2005.
Don Lawby, President of Century 21 Canada said the biggest price increases in Canada since 2001 were in Vernon, B. C. (129 per cent) northeast Calgary (121 per cent) and Fort McMurray (105 per cent.)
The survey found housing prices have increased faster than most other goods or services including food, automobiles, recreation and post-secondary tuition.
Lawby said part of the increase is due to a dwindling supply of land for residential development.
“We are seeing taller buildings on smaller footprints to keep costs down,” he said
Another new survey, released Thursday by RBC Economics, showed the affordability of housing is declining because of higher prices and increasing mortgage rates.
The RBC survey showed housing costs in Vancouver, including taxes and utilities, were eating up 64 per cent of a typical household’s monthly pre-tax income. In Toronto, the figure was 41.7 per cent.
But as long as mortgage rates remain relatively low and the economy remains strong, Lawby said the housing market should stay strong.
“We will continue to have a good market - maybe not spectacular - but close to last year,” said Lawby.